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Ci d b Presentation of Annual Report 2006/07 Parliamentary Portfolio Committee

development through partnership. Ci d b Presentation of Annual Report 2006/07 Parliamentary Portfolio Committee Wednesday, 07 November 2007. Presentation Layout. Introduction Legislative framework & Mandate Highlights for the FY 2006/07 Stats to date-context Performance Summary-Table

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Ci d b Presentation of Annual Report 2006/07 Parliamentary Portfolio Committee

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  1. development through partnership Cidb Presentation of Annual Report 2006/07 Parliamentary Portfolio Committee Wednesday, 07 November 2007

  2. Presentation Layout Introduction Legislative framework & Mandate Highlights for the FY 2006/07 Stats to date-context Performance Summary-Table Presentation of Financials Audit Process Audit findings Management’s corrective action Conclusions development through partnership

  3. Introduction development through partnership Legislative Framework & Mandate CIDB Act 38 of 2000…mandates the CIDB to • provide strategic leadership to industry stakeholders to stimulate sustainable growth, reform and development • Regulate the construction industry

  4. Introduction development through partnership Legislative Framework & Mandate • CIDB Act 38 of 2000…mandates the CIDB to establish the National Register of Contractors: • Facilitates public sector procurement, delivery and risk management • Supports contractor development • Promotes better performance - improved quality, safety, health and environment. • to categorise contractors in accordance with their capability

  5. Benefits of the RoC Support risk management in the tendering process Reduce the administrative burden To facilitate sustainable growth and transformation of contractors, enable effective access by the emerging sector Reduce tendering costs to clients and contractors Promote minimum standards and contractor best practice Enable access by the private sector Provide information on the size, distribution, nature and development of contractors To improve the performance of contractors Legislative framework and mandate development through partnership

  6. Highlights for 2006/07 Challenges Boom in the Construction industry Exponential Growth of the Register of Contractors Backlog in contractor registration- resolved in March Internal Growth –expansion programme in response to the growth of the RoC Challenge on resources and systems development through partnership

  7. Highlights for 2006/07 Focus areas/Projects Rollout of the Std for Uniformity Municipalities (main focus) Continued with National and Provincial Dept’s Continued with Parastatals Continued with support to Contractors Construction Contact Centers National Contractor Development Programme National Infrastructure Maintenance Strategy Support to 2010 Infrastructure Team (stadia) Independent Review of cidb development through partnership

  8. Stats to date-Class of Works by grading

  9. Stats-Exponential Growth Increase in registrations Dec 2004 – 1500 Dec 2005 – 7500 Dec 2006 – 27500 July 2007 – 42000 Dec 2007 – 55 000 projected, currently 51 000+ Total registrations = (active + suspended)

  10. Performance Summary Growth Economic Research & Monitoring of Public Sector Spending Publish quarterly construction economy monitor and improve quality of monitor based on information from the registers. Investigation into “Skills for infrastructure delivery - the challenge of restoring the skills pipeline” completed – report published Framework for ongoing Quarterly Monitors established development through partnership

  11. Performance Summary Growth Communication Promote outcomes of the Charter process. Monitor progress and promote sustainable empowerment initiatives and performance against targets. Construction Charter was launched. The next phase i.e. 3rd party review had not been finalised due to delayed DTI scorecard/BEE codes. development through partnership

  12. Performance Summary Growth Communication Procurement Forum (for procurement reform) and Focus Group (for register of professional service providers) engaged; National Treasury engaged to deal with Competitive bidding. Various public sector client capacitation workshops New website-work in progress Various communication tools development through partnership

  13. Performance Summary Performance CRS Phase I of registers-municipalities, etc Implementation of regulations Phase II-components investigated RoPSP Framework for Register of Professional Service Providers and consulted stakeholders development through partnership

  14. Performance Summary Performance CII’s Last ones published in 2005/06 AR New-contract awarded to UFS Strong link to Registers Link to Charter - after 3rd Party Review development through partnership

  15. Performance Summary Procurement and Delivery Procurement Reform 2000+ officials and consultants capacitated by the end of the financial year. Provided support and advice to the 2010 Infrastructure Procurement team in the procurement of contractors to build the 2010 stadia. Provided support in the development of procurement documents for the EC Department of Public Works, in conjunction with the Coega Development Corporation. Started focus on Compliance development through partnership

  16. Performance Summary Procurement and Delivery Public Sector Delivery Increased cidb participation and commitment to IDIP by increasing cidb capacity (internal staff). Hosted an international expert on Polarity Management as part of training for IDIP PMU (partners). Participated fully in the appointment and training of Technical Assistants for DPW and Department of Education, later in the appointment and training of Technical Assistants for Department of Health. development through partnership

  17. Performance Summary Procurement and Delivery Public Sector Delivery -- i-Tender Register of Projects Continued to promote the use of the i-Tender Register of Projects (RoP) to enable electronic registration of projects. Special project-Upscaled the registration of clients as employers to ensure they use the i-tender RoP. development through partnership

  18. Performance Summary Emerging Contractor Development Developed, in conjunction with National DPW, the framework for National Contractor Development Programme framework, to be rolled out to provinces-started where the first Outreach Centres/CCC would be established. Engaged the Banking Council and some regional bank offices to facilitate their involvement. Some banks eg in KZN (Ithala, ABSA) have responded with packages to support contractors. Kick-started establishment of Construction Contact Centres development through partnership

  19. Performance Summary Knowledge Centre and Research Agenda Cidb 4th Post Graduate Student Conference, hosted by the Institute of Transport Technology at the University of Stellenbosch, held from 8 to 10 October 2006 – attracting some 100 academics from around the world Continuous engagement with academic institutions and individuals regarding the research agenda development through partnership

  20. Performance Summary CIDB Impact - 5-year Evaluation Successful evaluation of cidb by independent Panel in Jan 29-Feb 02, 2007. Review report submitted to the Board, to be submitted to the Minister. Report is positive about the performance of cidb in the first 5 years, with recommendations to enhance further delivery on mandate. development through partnership

  21. Financial Performance Revenue Revenue from government increased by 19% to R40,012m from R33,510m in the previous year. This increase was in line with the business plan and budget expectations. Revenue from registers increased by 142% to R16,930m from R6,988m in the previous year Total expenditure Total expenditure increased by 33% compared to the previous year. The bulk of the this increase relates to Staff costs which increased by R8,339m(78%) from previous year.

  22. Financial Performance Finance income Interest income increased by 186% to R1,943m from R0,679m in the previous year. The surplus Surplus for the year is R5,525m to be utilized in the next year’s budget for the set up of CCC’s as part of our expansion program. Cash & Cash Equivalents Cash & cash equivalents increased by R8,073m from R18,261m. The bulk of this increase relates to Investments which grew by R6,962m(38%) from R18,110m.

  23. Financial Performance Accounts Payable Accounts payable increased by R4,375m from R14,408m. The bulk of this increase relate to two areas: ‘Contractors not assessed’ grew by R2,836m(41%) from R6,910m ‘Unallocated deposits grew byR3,621m(84%) from R4,293m

  24. AuditorGeneral Findings 2006/07 OVERVIEW One(1) Qualification Two(2) Other matters No Emphasis of matter

  25. AuditorGeneral Findings 2006/07 Qualification Finding ‘contractor accounts were incorrectly debited and/or credited which might have resulted in material misstatement of the accounts payable and accounts receivable balances disclosed in the statement of financial position’.

  26. AuditorGeneral Findings 2006/07 Qualification (continued) Management’s Action A reconciliation process has been started to reconcile each contractor account since inception. The reconciliation process is planned to be completed on 30 November 2007. We have requested Treasury’s approval to open up a new bank account which will be used for contractor deposits. All future deposits will be made to this new bank account. The existing bank account, which is a savings account, will be discontinued and all amounts in that account will be ring-fenced in order to simplify the reconciliation process.

  27. AuditorGeneralFindings 2006/07 Other Matters Finding Tenders were not always advertised for 30 days before closure as required in terms of Treasury Regulation 16A.6.3 Management’s Action All tenders are currently advertised for 30 days before closure in terms of Treasury Regulation 16A.6.3.

  28. AuditorGeneralFindings 2006/07 Other Matters (continued) Finding ‘The schedule of outcome of disciplinary hearings and/or criminal charges, names and ranks of employees involved and sanctions and any further actions taken against employees during the year under review were not submitted to the executive authority, National Treasury and the Auditor General as required in terms of Treasury Regulation 33.3.1’

  29. Auditor General Findings 2006/07 Other Matters (continued) • Management’s Action • - Treasury Regulation 33.3.1 is currently being complied with.

  30. Conclusions Our systems are being beefed up HR Resource allocation being increased New structure to deal with risk management Internal audit & AG’s recommendations being implemented New proactive approaches to managing the organisation Registration process being simplified

  31. ……………………….Thank you Conclusion development through partnership

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